Example 1: Historical Turnover

• Business A has a taxable turnover of £85,000 for the year ending 31st March 2024. On reviewing their turnover for April 2023 to March 2024, they find it exceeds £90,000.

  • Action: Business A must register for VAT by the end of April 2024.

  • Action: Business A must start adding VAT to relevant sales from 1st May 2024.

Example 2: Future Turnover

• Business B is launching a new product line and expects a significant increase in sales. They forecast that their taxable turnover will be £95,000 in April 2024 alone.

  • Action: Business B must register for VAT by the end of April 2024, as they expect to exceed the threshold in a 30-day period.

Example 3: Rolling 12-Month Turnover

• Business C reviews their turnover each month. In May 2024, they find that from June 2023 to May 2024, their taxable turnover is £92,000.

  • Action: Business C must register for VAT by the end of June 2024.

Additional Points

• Voluntary Registration: Even if your turnover is below £90,000, you may choose to register for VAT voluntarily. This can be beneficial if you regularly deal with VAT-registered businesses or want to reclaim VAT on your purchases.

• Exemptions: Certain businesses and transactions are exempt from VAT. Ensure you understand what is and isn’t included in your taxable turnover.

By following these steps and examples, businesses can ensure they comply with the new VAT registration threshold requirements effective from 1st April 2024.

Rolling Turnover Explained

Rolling turnover is a method of calculating your business's total taxable turnover over the last 12 months on a continuous basis. Unlike a fixed accounting period, rolling turnover involves constantly updating your calculations each month to include the most recent 12-month period. This helps ensure you remain aware of your business's VAT obligations.

How to Calculate Rolling Turnover

1. Identify Your Taxable Turnover:

   • Gather your sales data for the past 12 months, including all taxable sales (sales that are subject to VAT).

2. Calculate Monthly:

   • At the end of each month, total the sales for the past 12 months. This means each month you'll be looking at a new 12-month period.

3. Compare with the VAT Threshold:

   • Compare your rolling turnover with the VAT registration threshold (which will be £90,000 from 1st April 2024).

4. Register if Necessary:

   • If at any point your rolling turnover exceeds the £90,000 threshold, you must register for VAT.

Example of Rolling Turnover Calculation

Let's say you are reviewing your turnover at the end of May 2024. Here's how you would calculate your rolling turnover:

1. Collect Data:

   • Gather your sales figures from June 2023 to May 2024.

2. Total Sales:

   • Calculate the total of these monthly sales figures.

   • June 2023: £7,500

   • July 2023: £8,000

   • August 2023: £6,500

   • September 2023: £7,800

   • October 2023: £7,200

   • November 2023: £7,600

   • December 2023: £8,100

   • January 2024: £8,400

   • February 2024: £7,300

   • March 2024: £8,500

   • April 2024: £7,900

   • May 2024: £8,500

   • Total: £93,300

3. Comparison:

   • Compare the total rolling turnover (£93,300) to the VAT registration threshold (£90,000).

4. Action:

   • Since £93,300 exceeds the £90,000 threshold, you need to register for VAT by the end of June 2024.

Why Rolling Turnover is Important

• Continuous Monitoring:

  • It ensures that businesses stay aware of their VAT obligations and register promptly if their turnover exceeds the threshold.

• Avoid Penalties:

  • By regularly checking your rolling turnover, you can avoid late registration penalties and stay compliant with VAT regulations.

• Better Financial Planning:

  • Understanding your rolling turnover helps in better financial planning and anticipating future VAT liabilities.

Using the rolling turnover method keeps businesses proactive and compliant with VAT regulations, ensuring they register for VAT when required by law.